Consider the figure at the right. The blue line shows how many units of goods A and B a worker in…

consider the figure at the right. The blue line shows how many units of goods A and B a worker in Taiwan can produce, and the tan line shows the number of units of goods A and B that a worker in Korea can produce. Does this figure indicate anything about either worker having a comparative or absolute advantage in either good?

Can a country have comparative advantage in producing all goods and services? Can it have an absolute advantage in producing all goods and services?

What is meant by complete specialization? How does it affect the total level of output produced by both trading partners?


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